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September 17, 2015 -

Dancing Baby Takes Down Universal?

Before sending a take-down notice under the Digital Millennium Copyright Act (“DMCA”), consider whether the use of copyrighted material that you’re complaining about could be a fair use, or else face damages.  That’s the message from the U.S. Court of Appeals for the Ninth Circuit in Lenz v. Universal Music Corp., Nos. 13-16106, 13-16107 (Sept. 14, 2015), the famous “dancing baby” case.

In 2007 Stephanie Lenz uploaded to YouTube a 29-second video featuring her two young children dancing in the kitchen to Prince’s song Let’s Go Crazy.  Lenz titled the video Let’s Go Crazy after the song.  During the video Lenz asked her thirteen-month-old son what he thought of the music, which prompted him to bob up and down.  You can see the video here.  Without going into a full fair use analysis, suffice it to say that Lenz’s video is probably a fair use, since its purpose and character are non-commercial and the availability of the video is not likely to damage the commercial market for Prince’s song or its derivative works.

Lenz’s video was flagged in an online search query run by Universal Music Corp.’s legal department, which enforced the compositional copyrights in Prince’s songs.  An assistant reviewed the video and decided to include it in a DMCA take-down notice to YouTube because Prince’s song “was very much the focus of the video.”  While Universal’s review process considered such factors as how much of Prince’s songs were used and whether or not they were being played deep in the background in noisy environments, fair use did not formally enter into the process.

The DMCA (17 U.S.C. §512(c)) allows online service providers like YouTube which store and distribute user generated content to avoid copyright infringement liability if they “expeditiously” remove or disable access to content after receiving an infringement notice (a so-called “take-down” notice) that meets certain statutory requirements.  Among these requirements is a statement by the party sending the notice that it “has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.”  To avoid liability for disabling or removing content, the service provider must notify the user responsible for the content of the take-down.  Under the DMCA framework, the user then may restore the content by sending a counter-notification to the service provider, which must include a statement of good-faith belief that the removal or disablement resulted from mistake or misidentification.  On receiving a counter-notification that meets the statutory requirements, the service provider must inform the original complaining party and restore the content within not less than 10 days and not more than 14 business days, unless the service provider receives notice that the copyright holder or its agent has sued the user.

The DMCA also provides a legal remedy against abusive take-down notices and counter-notifications.  17 U.S.C. §512(f) provides, in relevant part:  “Any person who knowingly materially misrepresents …. that material or activity is infringing … shall be liable for any damages, including costs and attorneys fees, incurred by the alleged infringer … who is injured by such misrepresentation, as the result of the service provider relying upon such representation in removing or disabling access” to the material or activity.   After Lenz sent counter-notifications under the DMCA, Universal protested the video’s reinstatement in a communication that made no mention of fair use but simply pointed to the absence of any licenses granted to Lenz to use Prince’s song.  Lenz ultimately sued Universal for misrepresentation damages under §512(f).   Both parties moved for summary judgment to resolve the case without trial, and on September 14 the Ninth Circuit Court of Appeals affirmed the lower court’s denial of both summary judgment motions.

The key holding in the case is that the DMCA’s requirement that a take-down notice must include a statement of good-faith belief that the allegedly infringing material “is not authorized by … the law” means the copyright holder or other person sending the notice must have first considered the possible existence of fair use, because fair use is defined by the Copyright Act to be non-infringing and thus “authorized by … the law.”   If there is no consideration whatsoever of fair use, then the copyright holder sending the take-down notice risks knowingly misrepresenting that it has formed a good-faith belief that the material in question is infringing and may be liable for damages and attorneys’ fees under §512(f).  Or, to put it slightly differently, liability under §512(f) may be triggered unless the copyright holder, prior to sending the take-down notice, has considered fair use to the point that it does not knowingly misrepresent (implicitly) in the notice that it has formed a good-faith belief that the material is not a fair use.

Nevertheless, the standard of fair use consideration set out by the Lenz court is a minimal one.   This consideration need not be “searching or intensive.”  According to the Ninth Circuit, to avoid making a knowing misrepresentation in connection with a take-down notice, the copyright holder’s good-faith belief needs only to be subjective belief – it does not have to  be objectively reasonable, and, most importantly, it does not require prescient knowledge of how a court will eventually rule on a fair use issue.  If the copyright holder considers material not to be a fair use but a later ruling holds its position to be flat-out wrong, the copyright holder is not liable as long as its belief was actual and genuine.  Recognizing the enormous amount of potentially infringing content that copyright holders must grapple with in a digital age, the court noted that a subjective good-faith belief of the existence of infringement does not require any real investigation of the infringing content and suggested in a dictum that the standard could be satisfied by using a computer algorithm to cull material that consists largely of the reproduction of the audio and video elements of a copyrighted work for automatic take-down notices, while flagging less flagrant material (like Lenz’s video) for human review.

The court also held that although a copyright holder’s willful blindness as to the existence of fair use can be used to support a finding that it has knowingly materially misrepresented that it held a good-faith belief that offending activity is not a fair use, it nevertheless rejected the lower court’s decision allowing Lenz to use this theory at trial, given the lack of evidence.  Finally, the court held that Lenz did not have to prove any actual monetary loss in her §512(f) claim.  Rather, an alleged infringer who is injured by a copyright holder’s knowing misrepresentation in a DMCA take-down notice can recover “nominal damages due to an unquantifiable harm,” which presumably, in some if not all circumstances, can be used to bootstrap a recovery of the alleged infringer’s attorneys’ fees (the appeals court did not reach this issue in its Lenz ruling).

The sparring between the dancing baby and the music giant will no doubt continue in the trial court.  The David v. Goliath quality of the Lenz case (savvy mom throws DMCA back in the face of entertainment behemoth) has bemused many digital copyright lawyers over the last few years.   For copyright holders, however, the court has sent a clear warning:  “[c]opyright holders cannot shirk their duty to consider—in good faith and prior to sending a takedown notification—whether allegedly infringing material constitutes fair use….”